Open Innovation – A Step Too Far?

In a previous blogpost I related a talk I had given at the ETSI Summit in November when the focus was on how Standards Development Organisations could most sensibly work with Open Source projects, at a time when Open Source has become “ubiquitous”, yet the obstacles around IPR seem to many to be insurmountable. I was reminded of the talk when reading the results of the (as yet unpublished) research project of an M.Sc. student who, whilst working with a telecomms player, pitched his thesis on this very point. His results offered no magic solution, and whilst clearly identifying opportunity resulting from technology and market convergence, reflected on the continuing intransigence and reluctance to move from past traditional business models where patent rights were fundamental.

By now it must be clear to all that we won’t succeed in resolving these differences easily, so we must look to the market to define the needs, and from that we will receive clear demands from the users. Those solution suppliers that can and want to participate will be successful, those that can’t or won’t will fall by the wayside – whatever their size or current position. So let’s focus on looking forward, and in the context of these blog posts see what the Commission is doing to ensure that the digital market opportunity in Europe is being maximised.

In a week where we expect to see a package of announcements from the Commission, detailing planned steps around the Digital Single Market, the time is ripe to reflect on whether we can expect to get the sort of leadership from the Commission that the market demands if Europe is not to be left behind. It is timely also to reflect on the recently-opened Consultation on a revised European Interoperability Framework (EIF), and look at whether this meets the new needs for a pan-European public sector working within and across the Member States. The draft revised EIF is generally a positive improvement from the past (EIF v2), but notably the tone set is one of expecting Member States to adhere and conform. The signs are not good, many MS preferred to adopt even the previous version (EIF v1) for their direction – simply because it allowed them to be more prescriptive in choosing their list of open standards, and relating it directly to their local market needs. A key section missing from the latest version is the understanding that openness isn’t only a factor of transparency, but is a fundamental facet of building an innovative solution. Whilst I am a strong advocate of the excellent work of the Commission in bringing all stakeholders within ICT standardisation together within the Multi Stakeholder Platform, I personally remain frustrated by the limits retained from past business models. Next week we will see the result of various contributors’ inputs to the Priority ICT Standards Plan, a positive piece of work which has identified the new market trends that need to be addressed – no complaints there – but crucially in such debates the language is too often couched in terms of the mandating of formal standards, of standard essential patents (as if that was a positive attribute) within FRAND, and of a European market (in isolation).

Let’s face the facts:

We work in a global ICT market, standards will be set globally and typically (90%+) will originate within industry-led fora and consortia. This is not to decry in any way the need for European participation in standardisation, but this will come (as ETSI has recognised) from collaboration, from building bridges, not from seeking protectionism. This is actually good news for European users and market participants.

Openness is not just an aspect of transparency, and in the remit of standardisation means so much more than the governance structures. Of the standards development organisation The ubiquitous market term ‘Open Standards’ – studiously ignored in Commission legislation and thus its parlance – refers to the openness delivered in the solution as much as it does to the governance of the standards developing body.

Open Innovation, the term invented by Prof. Henry Chesbrough, may not be ideal but it adequately describes the opportunity for incremental valued added solutions built through collaborative working within a network of partners. Successful innovation across Europe will not be measured by the number of patents issued (increasingly equally true for companies as well), but in the ability successfully to leverage collaborative projects.

An open ‘community’ is a fundamental of that approach. The ability to offer restriction-free use in order to deliver full interoperability, portability across all business and development models is I’m afraid now a pretty essential building block. If you want to see the approach in action, within ICT you no longer have to look just at the Internet itself, but also at the approach to Open Data, Open Access and Open Science. All three are providing new opportunities to SMEs, where previously the barriers to entry were simply too high. Is this not what Europe needs?

The ‘new’ market opportunities – whether it be Cloud (now widely being built on open sourced community projects and methodologies), IoT (imposing the needs of converged technologies within collaborative models), Smart Cities (ditto) – are highly unlikely to be built using traditional business models.

Fortunately not all Member States are proving laggard in recognising the opportunity. The Netherlands were early in understanding the need to lead providing both strategic direction, and pragmatic support for the adoption of open standards. The UK stepped up to the mark, not only with its adoption of the Open Standards Principles and its determination to follow through on these Principles by selecting specific open document formats (despite enormous lobbying). For a great analysis of the issues and the benefits now being achieved in the UK, read the blog by Linda Humphries (the architect of the Policies – who’s now sadly moved on from the public sector). But of key importance is the understanding in UK Government of the real opportunity provided by openness across the market – followed not only by political support at the highest level, but by a succession of initiatives to develop new (typically SME) start-up entrepreneurial opportunity by opening up public data. Many other Member States have followed suit, the latest being Sweden with its proactive approach to open standards.

So when you are asked what the Commission should do, the answer should be to offer leadership. Leadership in providing clear direction looking forwards, removing obstacles which get in the way of pan European opportunity, and proactively supporting both the early market movers and pilots, and helping communicate best practice. But leadership doesn’t normally flow from just selecting the least controversial route.

When you read the DSM package of announcements next week, and the new draft of the EIF, then do apply the leadership test. Watch this space for more comment.